Mere E-Way Bill Expiry Does Not Establishes Intention To Evade Taxes: Gujarat High Court

The Gujarat High Court has held that mere e-way bill expiry does not establish an intention to evade taxes.

The division bench of Justice Sonia Gokani and Justice Mauna M. Bhatt has observed that the detention was on the ground that the goods were subject to the expiration of the e-way bill number, which had expired during the transit, and this cannot be the ground for detaining and seizing M.S. Billet along with the truck.

The petitioner/assessee has challenged the authority of the respondent/department, demanding the sum of Rs. 7,53,364 as a demand for tax and penalty under Section 129(3) of the Central Goods and Services Tax Act, 2017.

The petitioner submitted that the truck had remained in non-motorable condition, and thus, the goods that were to be delivered on or before October 17, 2022, could not be delivered in time. On October 19, 2022, at the time of inspection, because of the expiration of the e-Way bill number, it came to the attention of the officer that the entire truck along with the goods had been seized. The petitioner has been issued GST Form MOV No. 1, 2, 6, and 7, where he was called upon to remain present, and eventually, the order was passed demanding the tax and penalty.

The department justified the detention of the goods bearing an invoice value of Rs. 24,69,358/- along with conveyance on the ground that the e-Way bill had expired 41 hours before the time of interception. The period between the expiration of the validity of the e-Way bill and the time of interception was not substantiated, and no justification was offered by the conveyance driver. There was no satisfactory reason for the non-update of the e-Way bill that was given.

The court held that the department could not establish any element of tax evasion with fraudulent intent or negligence on the part of the petitioner. The e-Way bill was set to expire in nearly four and a half hours due to the delay. It appeared to be bona fide, without establishing any fraudulent intention.

Case Title: Shree Govind Alloys Versus State of Gujarat R/Special Civil Application No. 23835 of 2022

Citation: 2022 LiveLaw (Guj) 407

Counsel For Petitioner: Advocate Hemal Shah

Counsel For Respondent: Assistant Govt. Pleader Pooja Ashar

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